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Glossary · Energy industry & energy transition

Balancing energy

Balancing energy Balancing group Balancing group responsibility balancing energy electricity market Billing forecast error schedule

Balancing energy is the quantity of energy that a transmission system operator supplies to a balancing group or takes from it when injections and withdrawals in that balancing group do not match in a quarter-hour. It is settled retrospectively with the balance responsible party. Balancing energy is not a separate type of electricity and does not come from a dedicated power plant. Physically, the transmission system operators offset the imbalance of the entire system with balancing reserves. Balancing energy is the part of this that is allocated to an individual balancing group as a quantity and a price. This concept is where electricity trading, forecasting, grid operation and the financial responsibility for deviations meet.

A balancing group is an account in the electricity market. In it, injections, withdrawals and trades are consolidated so that the total balances out for every quarter-hour. The balance responsible party must ensure that the balance is in equilibrium in every quarter-hour and bears the financial responsibility for deviations. To this end, it submits a schedule to the transmission system operator, whose settlement-relevant time series must add up to zero for each quarter-hour. After delivery, the transmission system operator determines the balancing group deviation for each quarter-hour from meter readings and schedules. This quantity in kilowatt-hours or megawatt-hours is settled as balancing energy.

The time resolution is decisive. Balancing energy does not arise from a daily or annual balance, but from each individual quarter-hour. An example: a supplier has purchased exactly the right quantity of electricity for a day. However, its customers consume more than planned in the morning and less in the evening. In the morning its balancing group is then short and draws balancing energy; in the evening it is long and supplies balancing energy. Both quarter-hours are valued separately at the respective price. What matters for the system is when injection and withdrawal match, not just the daily total.

Distinction from balancing power and schedule deviation

Balancing energy is often equated with balancing power (Regelenergie). This loses the distinction between physical stabilisation and financial settlement. With Regelenergie, two things are distinguished: the transmission system operators hold balancing capacity (Regelleistung) in reserve. Balancing energy actually activated (Regelarbeit) is the energy actually called upon, for example from automatic secondary control (aFRR) and manual frequency restoration reserve (mFRR). With it, the grid operators offset the imbalance in the German grid control cooperation. Balancing energy (Ausgleichsenergie), by contrast, is the calculated quantity with which an individual balancing group is made to share in the costs and revenues of this balancing. The grid operators therefore describe the balancing energy price as the price of the balancing reserve actually activated.

Nor is a schedule deviation the same as balancing energy. The deviation initially describes only a difference between target and actual. It becomes balancing energy only through the rules of the balancing group system: validated measured values, the unambiguous assignment of all injection and withdrawal points to balancing groups, the settlement processes under the determination on the market rule for balancing group settlement in electricity (MaBiS), and the balancing energy price.

Why balancing energy matters in the electricity system

Injection and withdrawal in the power grid must remain continuously in balance. The market plans this balance in advance through schedules and trades. The transmission system operator secures it in real time. Without settlement of balancing energy, market participants could plan imprecisely and shift their forecasting risks onto the overall system. The costs of the short-term correction would then be borne by all grid users. Balancing energy allocates these costs approximately to the balancing groups that deviated from their plan. However, what is distributed is only the result of an overall system, not an individual causation measured exactly.

This creates an incentive to take balancing group responsibility seriously. Suppliers must forecast the consumption of their customers. A direct marketer must estimate the feed-in of wind and photovoltaic plants. Traders must close their positions in good time. Operators of flexible plants must align their operation with the schedules submitted. Under the standard balancing group contract, schedules within Germany can be changed with a lead time of one quarter-hour. Known deviations are thus meant to be balanced out through trading. The balancing group contract expressly permits balancing energy to be used only to offset deviations that cannot be forecast. Anyone who uses balancing energy systematically as a cheap source of procurement breaches the duty of balancing group fidelity.

Price formation: the reBAP

In Germany, a uniform balancing energy price has applied to all control areas since June 2010. Its full name is the cross-control-area uniform balancing energy price (regelzonenübergreifender einheitlicher Bilanzausgleichsenergiepreis), abbreviated reBAP. It is determined for each quarter-hour and is symmetric: under- and over-feeding in the same quarter-hour are settled at the same price. A short balancing group pays the reBAP for the quantity supplied. A long balancing group is credited the reBAP for the quantity taken. If the reBAP is negative, the direction of payment is reversed. The balance is settled monthly. The transmission system operators publish the validated reBAP values by the 20th working day of the following month.

Because the price is symmetric, the direction of the overall system determines gain or loss. If the system as a whole is short, the reBAP is usually high. A balancing group that is likewise short aggravates the situation and pays a lot. A long balancing group, by contrast, supports the system by chance and receives the same high price. For a balancing group, balancing energy can therefore bring costs or revenues. If the system is perfectly balanced and no balancing reserve is deployed, the price would arithmetically be 0 euros per megawatt-hour.

According to the decisions of the Bundesnetzagentur and the model description of the transmission system operators, the reBAP is composed of several components. The most important are:

  • Cost basis: the starting point is the costs and revenues of the secondary control and minute reserve energy called upon, in relation to the balance of the grid control cooperation. To prevent extreme values from arising at small balances, this price is capped.

  • Exchange price coupling: the reBAP is coupled to a price index of intraday trading. Balancing energy is thereby not meant to be cheaper than balancing through the intraday market.

  • Scarcity component: it applies when the balance of the grid control cooperation reaches at least 80 percent of the dimensioned and additionally contracted secondary control and minute reserve capacity. In the case of under-feeding it forms a lower limit, in the case of over-feeding an upper limit for the reBAP. Its value does not rise linearly but follows a parabola with the balance.

The whole system is subject to a tension. The price must be strong enough for balance responsible parties to take forecasting and short-term trading seriously. But it must not invite speculation on the system imbalance. The Bundesnetzagentur has repeatedly refined the components, because market participants had at times used the comparatively cheap balancing energy instead of covering their positions in the market.

Forecast errors, renewables and flexible consumers

With the growing share of wind and solar power, short-term forecasts become more important. Weather forecasts become more accurate the closer the delivery time gets. Anyone who sells a wind or photovoltaic position early and does not update later forecast changes through intraday trading risks balancing energy. The same applies on the consumption side. Households, commerce, industry, charging points and heat pumps generate load profiles in which every forecast error directly becomes a deviation. Many small errors often offset each other statistically. However, if many plants react at the same time to the same price signal or the same weather situation, new simultaneity effects arise.

Flexibility can reduce balancing energy if storage, controllable loads or flexible generators are deployed in a targeted way to adhere to the schedule. But it can also create new deviations if marketing, control and metering are not properly integrated into the balancing group processes. Technical flexibility does not replace a clear allocation of responsibility.

Typical misunderstandings

  • Balancing energy is not a penalty. The transmission system operators expressly do not regard the balancing energy price as a penalty, but as the price of the activated balancing reserve. The duty of balancing group fidelity nevertheless remains. Anyone who deviates systematically and avoidably must expect regulatory measures.

  • The transmission system operators do not take over procurement for individual market participants. They keep the overall system stable. The downstream settlement ensures that this stabilisation remains tied to the responsibility of the balancing groups.

  • High balancing energy quantities or conspicuous reBAP values alone do not yet prove a threat to security of supply. They can point to forecasting problems, market stress or power plant outages. For a judgement, however, further indicators are needed, such as available balancing reserve, frequency quality, grid congestion and the development of the residual load.

Distinction from redispatch

Balancing energy concerns the temporal and quantitative balance of injection and withdrawal. Redispatch concerns the spatial shifting of generation in order to relieve grid congestion. A balancing group can be balanced while redispatch is nevertheless necessary because electricity is generated in the wrong place. Conversely, the grid can be free of congestion while the balancing groups are unbalanced overall. So that redispatch measures do not appear as a balancing group deviation, they are reflected in the balancing group through separate redispatch time series.

Legal framework and current status (Germany)

At European level, the Guideline on Electricity Balancing, Regulation (EU) 2017/2195, governs the settlement of balancing group deviations. It applies directly. In Germany, the basis was for a long time found in the Electricity Grid Access Ordinance (StromNZV): § 4 regulated balancing group responsibility, § 8 the quarter-hourly, symmetric settlement. Following the CJEU judgment on the independence of the regulatory authority, the StromNZV ceased to apply at the end of 31 December 2025. The Bundesnetzagentur has incorporated the balancing rules into the business processes for supplying customers with electricity (GPKE) by determination, largely verbatim. In detail, the standard balancing group contract, the MaBiS and the decisions and model descriptions on the reBAP govern the settlement.

In short: balancing energy shows how well planning, forecasting and actual behaviour match in the short term. It does not explain all stabilisation costs. In the narrow sense, it denotes the financial allocation of balancing group deviations. It combines the freedom of electricity trading with the obligation to answer for one's own deviations towards the overall system, which must be balanced physically.

Sources

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Edited by eCMS on 11.11.2026 19:42

© 2026 Erik Schmidt. All rights reserved. Quotations with a link to the source are welcome.